Feeling the heat

“Many people may find this [unappealing], but the sound of fish moving is important to farmers and [indicates] the size of the fish and whether it is in distress or just looking for food,” says Teng, who started helping out at his father’s seawater farm when he was seven. “I started with feeding the fish, then later helped with cleaning the water and the ponds in which the fish were kept,” he recounts, adding that his father allowed him to perform the delicate task of “removing the eggs from the belly of the fish” only when he was in his teens.

Teng took over the farm after his father passed away in the 1980s, working without a day off. However, pressures from the rising cost of rent, labour and fish feed from the mid-2000s put a strain on his earnings and led to the shutdown of his farm in 2014. While this was not an easy decision to make, he says it was necessary to prevent further losses. “When I took over [the farm] from my father, I could make close to $5,000 a month. But in the months before I closed down, making $800 to $1,000 was [an achievement]. So, I thought, no point continuing,” he says.

Teng now works as a despatch rider at an MNC. “The last few years [at my farm] were so tough, my interest in fish farming disappeared. Now, I just want to take it easy and pass my time with an easy job,” he says.

Today, five years after Teng gave up fish farming, operating a farm in Singapore is getting even harder and costlier. Other farmers The Edge Singapore spoke to are feeling the strain and looking to give up as well.

An example is Oh Chin Huat Hydroponics Farms (Oh’ Farms), located on Bah Soon Pah Road, a small enclave off Khatib, which will soon be given up for redevelopment next year. While the operator has the option to bid for a land parcel in Lim Chu Kang, where most of Singapore’s traditional farmers are located, Oh’ Farms’ fourth-generation farmer Ore Hui Ying says the move will be costly — totalling nearly $2 million. This is because a substantial amount of money will be needed to tear down the current infrastructure and put up another at the new site. “It is really very expensive,” says Ore, whose family has been operating its 2.4ha hydroponic farm for 28 years.

Another costly expense will be the upfront payment needed for the entire lease period of about 10 years. How much it costs will depend on the size of the plot they are allocated.

“The business is already very competitive. The truth is, if you depend on growing vegetables for survival, it is very, very hard,” Ore tells The Edge Singapore. She says her family may decide to quit the business when their lease expires next September.

The Ohs started off producing local greens such as water spinach (kangkong), spinach and cabbage, but eventually also started growing herbs such as sweet basil, chives, lemon balm, mint and rocket (arugula), as “they are of higher value”. These vegetables are sold primarily to supermarket chain NTUC FairPrice, under its Pasar house brand.

Still, with only 18% of the farm’s total revenue coming from vegetable production, business is indeed competitive. The bulk of Oh’ Farms’ revenue — about 82% — comes from its resale of vegetables from wholesalers to hotels, restaurants, food caterers and hospitals, as well as from farm tours and the setting-up of infrastructure for vegetable-growing in schools or office spaces.

While Ore acknowledges that the family farm is “not producing at 100%”, she says it is tough, given that the costs of local produce are higher than those of imports, even after taking into account transport costs. This is because the imports are mass-produced and have lower unit costs. The local, traditional farms have high labour costs, as the farming is typically done by foreign workers, who each cost roughly $2,000 a month. Oh’ Farms hires about 30 foreigners, as locals are generally not interested in getting their hands dirty.

Over at Lim Chu Kang, the 2.83ha Viknesh Dairy Farm is also facing high operational costs of $12,000 a month on labour, animal feed, rent and utilities. The 18-year-old farm is one of three smallholdings in the city state that produce dairy milk. The farm has 70 cows, but only half of them are contributing to the milk output of about 120 litres a day. Owner Maniam sells the output to Hindu temples. While he declines to disclose the percentage of revenue it generates, he says it is “small”; he makes more money bringing his cows to prayer ceremonies at temples and homes.

To try and boost profits, Maniam is looking to bring in 20 cows from the Agri-Food and Veterinary Authority (AVA)-approved countries of Australia and New Zealand. He hopes the additional cows will increase the farm’s milk production to at least 200 litres a day, which will enable him to sell to supermarkets and minimarts at a higher price.

Amid these pressures, the Singapore government had earlier this year declared its goal to have 30% of the country’s total nutritional needs produced locally by 2030. And it sees that technology will be a key element in attaining that goal.

Speaking in Parliament at the Committee of Supply Debate on March 7, Environment and Water Resources Minister Masagos Zulkifli called for new methods to overcome Singapore’s resource constraints and boost produce yields. “Getting to the ‘30 by 30’ vision will require our agri-food industry to adopt new solutions to raise productivity, apply R&D, strengthen climate resilience and overcome our resource constraints. We need new paradigms in the agri-food industry,” he said.

Masagos also unveiled three “food baskets” — diversified import sources and food produced locally and abroad — to help Singapore develop a more secure food supply. Increasing and diversifying the countries from which the city state imports food will reduce reliance on a single country and thereby the security threat, the Singapore Food Agency (SFA) notes. As for the second and third baskets, Masagos suggests the adoption of tech-based solutions that will allow Singapore’s farmers to produce higher yields from smaller and more productive spaces.

Unpacking 30 by 30

The “30 by 30” strategy was formulated after instances of disruptions to imports, either because of inclement weather, crop failure or policy. With only 1% of Singapore’s total land being used for agriculture currently, only 10% of food demand is satisfied with local produce. Close to 90% of the city’s food is imported from all over the world: rice from Thailand; fish, eggs and vegetables from Malaysia; pork from Indonesia; and chicken and bananas from Brazil and the Philippines.

Paul Teng, adjunct senior fellow specialising in agriculture studies at the Centre for Non-traditional Security Studies at the S Rajaratnam School of International Studies (RSIS), notes that Singapore’s nutritional needs would include vegetables, fish and eggs as well as future foods, including alternative protein sources such as plant-based meat, cellular/clean meat, algae-based protein, fungal protein and insect protein.

Based on 2017 figures — the most recent available — from AVA, consumption of the 10 most common food items (vegetables, leafy vegetables, fruits, chicken, pork, fish, other seafood, mutton, duck and beef) amounted to 1.36 million tonnes. In the same year, about 1.97 billion eggs, or 108,300 tonnes of 55g eggs, were consumed. According to SFA — which was formed in April and took over the food-related functions of AVA, the National Environment Agency and the Health Sciences Authority — in 2018, domestic production of leafy vegetables, fish and eggs stood at 13%, 9% and 24% of demand respectively. Based on 2017 levels, that equates to about 11,800 tonnes of leafy vegetables, 5,900 tonnes of fish and 500 million eggs produced in 2018, says RSIS’ Teng.

Now, as part of the “30 by 30” goal, Teng estimates that local farmers would need to produce 30,400 tonnes of vegetables, 28,500 tonnes of fish and 625 million eggs. This means they would need to increase vegetable, fish and egg production by 6.2%, 79% and almost 20% respectively.

But even before they can plan how to boost their yields to reach those targets, farmers need to see the business case for continuing in the industry. “Farmers are entrepreneurs who need to make profits to continue operating,” notes Kenny Eng, director of Gardenasia and former president of the Kranji Countryside Association (KCA).

Support systems

SFA is in charge of implementing the “30 by 30” strategy and ensuring Singapore’s food safety and security. SFA works closely with industry and R&D partners to develop new solutions and products. It also spearheads food security initiatives and gives out funding to agri-tech companies.

SFA has declined to disclose details such as the total number of farms in Singapore and the proportion of traditional and high-tech farms. But it says there has been an increase in the number of vertical, tech-based farms locally, from 12 in 2016 to 29 in 2017 and, most recently, 34 in 2018. It notes that the technologies employed by these farms enable them to produce 10 to 15 times more vegetables and fish per hectare than traditional farms.

Experts note that such methods are space-efficient and maximise the yield of crops — ideal in a compact, highly urbanised space such as Singapore.

To facilitate the adoption of tech solutions by farmers, SFA is managing the Agriculture Productivity Fund (APF), launched by AVA in 2014. Eligible appicants for the productivity-enhancing scheme can receive funding of up to $2 million. SFA also offers test-bedding funding capped at $500,000 for food farms that are trying new solutions. “Many farmers have told us that they are happy to adopt more productive technology. However, new farming systems require heavy capital investments. Advanced greenhouse systems with environmental controls and automation, which can double their production, can cost around $4 million,” said Senior Minister of State for National Development Koh Poh Koon in Parliament in March 2018 when he explained why he revised upwards the initial caps set in 2014 under the different schemes.

Eligible farms require a valid SFA farm licence and fall into two categories: those that produce commonly consumed foods such as chicken and quail eggs, leafy vegetables, bean sprouts and food fish. All other farms, such as ornamental fish farms and mushroom farms, come under the second category. In an email response to The Edge Singapore, SFA said $9.36 million of a committed $22.1 million for 151 projects had been disbursed as at March 31.

Separately, specific to start-ups, there is a $90 million fund started by SEEDS Capital, Enterprise Singapore’s (ESG) investment arm. The fund is supported by seven co-investment partners and looks to inject liquidity and provide hands-on assistance, mentorship and connections to entrants in the agri-food tech space.

Besides the availability of funding, there are many favourable factors that facilitate the setting-up of an urban farm in Singapore. These include easy access to R&D centres. A case in point is SMART, the research enterprise launched jointly by the renowned US-based Massachusetts Institute of Technology and the National University of Singapore to manufacture chemicals that can be used in urban farming. The technology — which accelerates the genetic engineering of microbes — will result in the quicker, cheaper and more accurate construction of systems to boost agriculture yield.

Other government initiatives include SFA’s 1.8ha Marine Aquaculture Centre that looks to deepen Singapore’s strength, particularly in the production of Asian seabass. There is also a Food Innovation and Resource Centre, launched by ESG and Singapore polytechnic, which has projects in the areas of product and process development, packaging innovation and enhanced shelf life.

Costs and concerns

To be sure, the funding and technical know-how provided by the government has helped farms improve their production systems. One outfit that has been held up as an example is Sustenir Agriculture, an indoor farm that produces vegetables and fruits such as kale and berries through controlled environment agriculture, vertical farming and hydroponics. The 930 sq m urban farm is using technology to grow cold-weather crops in Singapore, and boasts a 90% consistency while using 95% less water than traditional farms, as its harvested crops need not be washed before consumption. It produces one tonne of kale or 3.2 tonnes of lettuce every month in an area of 54 sq m, which is reportedly between 14 and 127 times more than the yield of traditional farms using the same area.

Meanwhile, Barramundi Asia is a leader in fish farming. It employs large-scale fry production technology, recirculating aquaculture systems, seawater intake and seawater supply and treatment systems at its facility. It also has technology for fingerling sorting, vaccination and automatic feeding. Its 1,200 sq m farm currently yields 800 tonnes of fish a year, which are sold in supermarkets, restaurants and directly to consumers in Singapore, CEO Joep Klein Staarman tells The Edge Singapore.

The company hopes to increase production to about 6,000 tonnes a year by 2026 through the acquisition of more production sites and the development of vaccines to prevent its fish from falling ill.

Technology is also increasing productivity at egg farms. N&N Agriculture has a fully automated platform that packs and wraps egg trays.

SFA notes that these APF beneficiaries have seen a reduction of about 189,500 man hours and increased production of leafy vegetables by 1,100 tonnes, fish by 400 tonnes and eggs to 46 million.

Such figures are undoubtedly a boost for Singapore’s food security goal. But the high-tech push also means much higher costs for farmers, and would only further put off traditional farmers such as Teng and the Ohs.

The infrastructure investments for high-tech farms are substantial, notes RSIS’ Teng. He points out the monthly operation costs will include higher utilities charges. A check on the financial statements of three high-tech farms registered with the Accounting and Corporate Regulatory Authority (ACRA) shows that they are in the red. Sustenir recorded after-tax losses of $407,063 in FY2017, the most recent data available, though this was an improvement from its loss of $992,088 in FY2016. Another farm, Edible Garden City, which has a 2,000 sq m vegetable farm in Queenstown, also recorded losses — of more than $200,000 in its FY2018, a huge increase from the losses of more than $31,000 it incurred in FY2017.

Fish farm Barramundi Asia was the worst hit; it incurred a loss of $6.14 million in FY2017, up from FY2016’s $2.56 million loss. This is because the company incurred higher infrastructure and technology expenses.

One way for the farms to recover their losses is to seek private funding from investors such as food incubator Innovate360 or through bank loans such as DBS Bank’s Green Bond. While the former looks at helping any company looking to scale in the food industry, the latter requires applicants to use the fund for environment-friendly initiatives. But, farmers say it is not so easy to get funding. “We are already cash-strapped, so taking a loan is hard, and having to repay it, with interest, makes it even tougher,” says a farmer who wants to remain anonymous.

Darren Ho, an agriculture consultant, raises another concern. He says the ambitious production targets that the various high-tech farms are projecting “may well be a way to get the grants”. According to him, it takes time for technological developments to reap results. “It may take one year or 10 years to see results; the farmer has to believe in his product and wait to see it bear fruit.”

Growing abroad

William Chen, Michael Fam Chair Professor in Food Science and Technology and director of its programme at the Nanyang Technological University (NTU), says one way for Singapore’s farmers to overcome the high cost of high-tech farming is by sharing their technical expertise with their foreign counterparts. He believes that Singapore’s strength in technology will be welcomed by other more resource-rich countries, as it will enable the farmers there to benefit as well. Already, there are examples of this kind of collaboration, with Singapore’s Temasek Holdings taking the lead and growing six tonnes of brown rice a hectare — more than four times the traditional yield — in Tasikmalaya, Indonesia. Temasek rice, a non-genetically modified rice, was produced by cross-breeding a type of jasmine rice grown in Southeast Asia with five other rice types grown in the region.

Jumping on the bandwagon is Singapore-based rice producer Golden Sunland, which has a project in Myanmar. “It was a natural decision to work in Myanmar — the industry there is not as mature as in other Asean countries such as Thailand and Indonesia,” says chief operating officer David Chen, whose farm focuses on rice planting from “seed to farm to table”. Chen says he can achieve double the yield of farmers in the country, at the same cost of between US$250 ($346.30) and US$300, on a 0.4ha plot. The company brought home its first batch of rice in April and is looking to bring back at least 5% of an expected annual production of 50,000 million tonnes in the next five years.

NTU’s Chen says it is good for more players such as Golden Sunland to go abroad, as a way to spread out Singapore’s food sources. “Once [other countries] work more with Singapore, we can import directly from them and not face as much risk,” he points out. He believes such a situation will increase the number of food producers, which will “increase production yields while maintaining costs at a reasonable rate”.

Still, there are concerns that producing abroad will result in a similar predicament as importing produce, because the products will have to comply with the regulations, including any export restrictions of the country they come from. But, Chen is confident that growing abroad will bring about “net benefit”, as “an export of technology will eventually increase the overall supply of food available”. He notes that with the mass adoption of high-level technology, the quantity of food produced will increase multifold regardless of weather conditions, making supply consistent.

Developing a food ecosystem

While RSIS’ Teng and NTU’s Chen believe that the “30 by 30” goal is highly attainable, others such as agriculture consultant Ho, Gardenasia’s Eng and Manda Foo, co-author of a book titled Food Matters: Food Security and the Future of Food, have their reservations. “In fact, we can even do ‘50 by 30’, or ‘70 by 30’, based on the resources in Singapore,” says Foo. “But the foundations to support businesses to achieve it are not there. Yes, you can have all these grants, but if there is no lease certainty, if you don’t have workers, it will just be a tagline,” she says.

Ho and Eng agree, saying that a mindset shift and proper strategies are needed to help farmers remain profitable and productive. These include driving demand for local produce by creating more consumer awareness on local farms. “Support for local produce should be a core focus; [only] then will there be demand and [the] incentive for farmers to keep growing,” says KCA’s Eng.

The farmers whom The Edge Singapore spoke to also caution against technology being the sole solution, as some say it may not be sustainable in the long term because of the costs involved. “People want cheaper, faster and better food, but with the higher cost of technology, farmers may not be able to produce the goods as cheaply as people want,” says Foo.

Likening Singapore’s food security goal to its setting-up of an integrated water system here, RSIS’ Teng notes that the city state can become more self-reliant through the establishment of a food ecosystem. “With dedicated planning and investment, Singapore, by leveraging technologies, produces 70% of its own water through recycling and desalinated water; the remaining 30% is either imported or from local catchments,” he says.

A similar strategy for food will involve a 30% domestic production of vegetables and foods, with the remainder coming from Singapore-led farms abroad as well as a diversified base of countries to import from — similar to the goal set in the “30 by 30” strategy.

The difference between the city state’s achievement in water and its food security goal is that there is no choice when it comes to Singapore-produced water but to drink it, unlike Singapore-produced food, which consumers have the option of not eating. As such, farmers will continue to feel dissatisfied and consider leaving the industry after a spate of losses, making the attainment of “30 by 30” an uphill task, based on the trend in the industry currently. The only way to improve this situation is for local produce to be promoted more actively.

See also: ‘Growing population and climate risks are seeding interest in food and agriculture investments’